April 21, 2017- The Greater Golden Horseshoe (GGH) has implemented a Non-Resident Speculation Tax (NRST) of 15 per cent on the purchase or acquisition of an interest in a residential property location in the GGH by individuals who are not citizens or permanent residents of Canada or by foreign corporations and taxable trustees. The NRST applies in addition to the general land transfer tax in Ontario. The GGH includes the following geographic areas: Brant, Dufferin, Durham, Haldimand, Halton, Hamilton, Kawartha Lakes, Niagara, Northumberland, Peel, Peterborough, Simcoe, Toronto, Waterloo, Wellington and York.
How does this NRST affect foreign nationals who purchase residential property in Canada? A foreign national who has no link to the GGH will be affected by this tax. A foreign national who has a link to the GGH may fall within an exemption or may be eligible for a rebate of the tax.
Exemptions for Foreign Nationals
There are several exemptions to the NRST:
- A foreign national who has received confirmation under the Ontario Immigrant Nominee Program at the time of the purchase or acquisition and the property must be used as the foreign national’s principal residence;
- A foreign national who is conferred the status of “convention refugee” or “person in need of protection” (“refugee”); or
- A foreign national who has a spouse who is a Canadian citizen, permanent resident of Canada, “nominee” or “refugee”.
Rebates for Foreign Nationals
A rebate of the NRST may be available in the following situations:
- The foreign national becomes a Canadian citizen or permanent resident within four years of the date of the purchase or acquisition;
- The foreign national is a student who has been enrolled full-time for at least 2 years from the date of the purchase or acquisition in an “approved institution”; or
- The foreign national has legally worked full-time in Ontario for a continuous period of 1 year since the date of the purchase or acquisition.
To be eligible for the rebate, the foreign national must exclusively hold the property or hold the property exclusively with his or her spouse. The property must also have been used as the foreign national’s principal residence for the duration of the period.
For immigration related information regarding the new NRST, please contact us. If you have an administrative or technical question about the NRST, please contact the Ministry of Finance at 1-866-668-8297.